So what gives? The only real risk for utilities is that regulators will punish them if they screw up an investment, or political pressure forces cuts in returns. For example, SDG&E told investors that the PUC might dun it $30 million to $110 million for the shutdown of the San Onofre nuclear plant — which was a partner utility’s fault.

For regulators, the trick is to pay enough to attract capital, but not so much as to create political outrage. Regulators often benchmark other utilities, creating a circular logic that sometimes moves rates of return higher than competing investments, but at other times leaves them lower, as during the high-interest days of the 1980s.

California has arguably needed higher returns to encourage its giant investments in green energy. SDG&E’s equity ballooned from $2.2 billion in 2007 to $4.3 billion last year, according to Bob Schlax, the utility’s chief financial officer.

This has nearly doubled the overall income for shareholders, by the way. Meanwhile, health care and other costs are rising.

Now SDG&E’s electricity rates are among the nation’s highest, with a hike coming in September. The last time rates got so high, in the 1990s, outrage caused a chain reaction that gave us deregulation, and the 2000-01 power crisis.

So, incredibly, our expensive political choice to build a green energy system has increased the risk to utilities, thus helping regulators justify a hefty rate of return. Welcome to California.